ARMENIA Trends and Developments Contributed by: Mesrop Manukyan, Anahit Sargsyan, Maria Petrosyan and Ani Avetikyan, MB Legal
intellectual property rights. For instance, there are strict prohibitions on employing minors in heavy or hazardous work environments. Regarding intellectual property, the law generally vests property rights for works created during employment with the employer unless otherwise agreed. These updates are essential for companies in the creative and technology sectors, where human capital is the primary asset. A Digital Shift in Migration Management The regulatory framework for migration in Armenia is set for a major overhaul with the adoption of Law HOOH-11-NOW (HO-11-N) in early 2026. Entering into force on 1 November 2026, these reforms tran - sition migration management into a fully digital era. Central to this transformation is the launch of the Elec - tronic Unified Platform, which will centralise all resi - dency and work permit proceedings. This platform is designed to streamline communication between state bodies, employers, and foreign citizens, significantly reducing the reliance on traditional paper-based appli - cations. A significant legal shift under the new law is the intro - duction of the “One Status” rule, which prohibits for - eigners from holding multiple residency categories simultaneously. The law also begins the process of phasing out the previous “special residency status” (ten-year passports) for new applicants, integrating these categories into a more standardised temporary and permanent residency framework. Furthermore, temporary residency permits will now be granted for durations of up to one year, aligning closely with specific employment or study contract dates. These changes provide a more structured and transparent hierarchy for legal residence within the jurisdiction. To manage regional labour market dynamics more effectively, the government has introduced an annual quota system for residency statuses based on type and quantity. Additionally, a new “Work Visa” category has been established, allowing foreigners to enter for short-term employment or to finalise residency appli - cations for up to 120 days. This visa is non-extendable and can only be issued once per calendar year, pro - viding a clear path for short-term expertise. However, any residency or work status remains fragile if a for - mal employment contract is not registered within 15
working days, as this failure can trigger a revocation of the status. The 2026 reforms also emphasise automated data verification by integrating the migration platform with other national registers. This allows for real-time vali - dation of applicant data against tax records, the state population register, and the cadastre of real estate. Such integration ensures that residency grounds, such as legitimate employment or property owner - ship, are continuously monitored against official state records. This digital rigour is intended to enhance the overall integrity of the migration system while improv - ing efficiency for international businesses operating in Armenia. Modernising Corporate Finance: Convertible Notes A targeted but highly significant corporate law reform was enacted in 2025 through amendments to both the Civil Code and the Law on Joint-Stock Companies. These reforms enable international-standard invest - ment structures, such as convertible notes, which were previously difficult to implement under Armenian law. A convertible note is now explicitly recognised as a loan that can be converted into equity upon certain triggers or dates. In our view, this is one of the more consequential changes for the local startup ecosys - tem in recent years: founders and investors now have a familiar early-stage financing tool that no longer needs to be artificially engineered around gaps in the prior legal framework. Under the new rules, the process for issuing shares upon conversion is streamlined to reduce legal fric - tion. The law ensures that the rights of existing share - holders are balanced against the needs of new inves - tors during these conversions. This reform is a direct response to the needs of the burgeoning Armenian tech ecosystem and venture capital market, and we expect it to lower the transaction costs and legal risk that previously made Armenian entities less attractive vehicles for early-stage rounds. In practical terms, it allows local firms to attract international funding using instruments that global investors already understand and trust, removing a recurring point of friction in cross-border deal negotiations.
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